A BILL TO BE ENTITLED
AN ACT to amend statutes on interest rates to use the term "federally insured depository institution" and to establish express authority to enforce those statutes.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 1 of Chapter 24 of the General Statutes is amended by adding new sections to read:
"§ 24‑1.05.  "Federally insured depository institution" defined.
In this Chapter, "federally insured depository institution" means an insured depository institution, as defined in 12 U.S.C. § 1813, or an insured credit union, as defined in 12 U.S.C. § 1752. This term, however, does not include a subsidiary or affiliate of a federally insured depository institution that is not itself a federally insured depository institution.
"§ 24‑1.010.  Enforcement authority.
The Attorney General, the Commissioner of Banks, and the Administrator of Credit Unions may enforce the provisions of this Chapter."
SECTION 2.  G.S. 24‑1.1 reads as rewritten:
"§ 24‑1.1.  Contract rates and fees.
(a)	Except as otherwise provided in this Chapter or other applicable law, the parties to a loan, purchase money loan, advance, commitment for a loan, or forbearance, other than a credit card, open‑end, or similar loan, may contract in writing for the payment of interest not in excess of the following:
(1)	Where the principal amount is twenty‑five thousand dollars ($25,000) or less, the rate set under subsection (c) of this section.
(2)	Any rate agreed upon by the parties where the principal amount is more than twenty‑five thousand dollars ($25,000).
…
(d)	Any federally insured depository institution organized under the law of North Carolina or of the United States may charge a party to a loan or extension of credit governed by this section a fee for the modification, renewal, extension, or amendment of any terms of the loan or extension of credit. The fee shall not exceed the greater of one‑quarter of one percent (1/4 of 1%) of the balance outstanding at the time of the modification, renewal, extension, or amendment of terms, or fifty dollars ($50.00).
(e)	Any federally insured depository institution organized under the law of North Carolina or of the United States may charge a party to a loan or extension of credit not secured by real property governed by this section an origination fee as follows:
(1)	For a loan or extension of credit with a principal amount of one hundred thousand dollars ($100,000) or greater, the maximum origination fee is one quarter of one percent (1/4 of 1%) of the principal amount.
(2)	For a loan or extension of credit with a principal amount less than one hundred thousand dollars ($100,000), the origination fee shall not exceed the amounts in the following table:
Principal Amount	Maximum Origination Fee
$0 to $1,499.99	$100.00
$1,500 to $19,999.99	$150.00
$20,000 to $29,999.99	$175.00
$30,000 to $49,999.99	$200.00
$50,000 to $99,999.99	$250.00
(3)	If (i) the loan or extension of credit has a principal amount less than five thousand dollars ($5,000), (ii) the borrower is a natural person, and (iii) the debt is incurred primarily for personal, family, or household purposes, the loan or extension of credit shall not have an annual percentage rate that exceeds thirty‑six percent (36%), inclusive of the origination fees permitted by this subsection and the interest permitted by subsection (c) of this section. For purposes of this subsection, "annual percentage rate" shall be calculated in accordance with the federal Consumer Credit Protection Act, Chapter 41 of Title 15 of the United States Code, (Truth in Lending Act) and the regulations adopted under it.
…."
SECTION 3.  G.S. 24‑2.2 reads as rewritten:
"§ 24‑2.2.  Interest on extensions of credit by federally insured depository institutions; exceptions.
Notwithstanding any other provision of law, federally insured depository institutions chartered in this State by this State or by the federal government are each entitled to charge on extensions of credit those interest rates allowed any lender under State law. This section does not apply to rates provided in Article 15 of Chapter 53 of the General Statutes or Subchapter III of Chapter 54 of the General Statutes."
SECTION 4.  G.S. 24‑11 reads as rewritten:
"§ 24‑11.  Certain revolving credit charges.
(a)	On the extension of credit under an open‑end credit or similar plan (including revolving credit card plans and revolving charge accounts, but excluding any loan made directly by a lender under a check loan, check credit, or other such plan) under which no service charge shall be imposed upon the consumer or debtor if the account is paid in full within 25 days from the billing date, but upon which there may be imposed an annual charge not to exceed twenty‑four dollars ($24.00), there may be charged and collected interest, finance charges, or other fees at a rate in the aggregate not to exceed one and one‑half percent (11/2%) per month computed on the unpaid portion of the balance of the previous month less payments or credit within the billing cycle or the average daily balance outstanding during the current billing period.
(a1)	If the lender chooses not to impose an annual charge under this section, the lender may impose a service charge not to exceed two dollars ($2.00) per month on the balance of any account that is not paid in full within 25 days from the billing date.
(a2)	No person, firm, or corporation may charge a discount or fee in excess of six percent (6%) of the principal amount of the accounts acquired from or through any vendors or others providing services who participate in the plan.
(b)	On revolving credit loans (including check loans, check credit, or other revolving credit plans whereby a federally insured depository institution or other lending agency makes direct loans to a borrower), if agreed to in writing by the borrower, the lender may collect interest and service charges by application of a monthly periodic rate computed on the average daily balance outstanding during the billing period, not to exceed one and one‑half percent (11/2%).
(c)	Any extension of credit under an open‑end or similar plan under which there is charged a monthly periodic rate greater than one and one‑quarter percent (11/4%) shall not be secured by real or personal property or any other asset. This subsection does not apply to consumer credit sales regulated by Chapter 25A of the General Statutes. In any action initiated for the possession of property in which a security interest has been taken, a judgment for the possession of the property shall be restricted to commercial units, as defined in G.S. 25‑2‑105(6), for which the cash price was one hundred dollars ($100.00) or more.
(d)	In this section, the term "billing date" means any date selected by the creditor and the bill for the balance of the account must be mailed to the customer at least 14 days prior to the date specified in the statement as being the date by which payment of the new balance must be made in order to avoid the imposition of any finance charge.
(d1)	A lender may charge a party to a loan or extension of credit governed by this section a late payment charge not to exceed five dollars ($5.00) on accounts having an outstanding balance of less than one hundred dollars ($100.00) and ten dollars ($10.00) on accounts having an outstanding balance of one hundred dollars ($100.00) or more, for any payment past due for 30 days or more. In no case shall the late charge exceed the outstanding principal balance. If a late payment charge has been once imposed with respect to a late payment, no late charge shall be imposed with respect to any future payment that would have been timely and sufficient but for the previous default.
(e)	An annual or service charge pursuant to this section upon an existing credit card account upon which the charge has not previously been imposed shall not be imposed unless the lender has given the cardholder at least 30 days notice of the proposed charge and has advised the cardholder of the cardholder's right not to accept the new charge. This notice shall be bold and conspicuous and shall be on the face of the periodic billing statement or on a separate statement that is clearly noted on the face of the periodic billing statement provided to the cardholder. If the cardholder does not accept the new charge upon an existing credit card account, the lender may require that the cardholder make no further use of the account beyond the 30‑day period in order to avoid paying the annual charge, but the cardholder shall be entitled to pay off any remaining balance according to the terms of the credit agreement. Nothing in this subsection limits the lender from decreasing any rates or fees to the cardholder. Should any cardholder within 12 months of the initial imposition of an annual charge rescind the cardholder's credit card contract and surrender all cards issued under the contract to the lender, the cardholder shall be entitled to a prorated refund of the annual fee previously charged, credited to the cardholder's credit card account."
SECTION 5.  This act becomes effective October 1, 2019, and applies to contracts entered into, renewed, or modified on or after that date.